Seaports Magazine - Fall 2015 - (Page 53)

» GUEST VIEWPOINT Data Strategies to Avoid Trouble Ahead, Trouble Behind By Walter Kemmsies Moffatt & Nichol W hen issues related to transportation infrastructure come up, the lyrics to the Grateful Dead's Casey Jones come to mind. In the context of ports, trouble results from either higher than expected levels of demand, which may be due to economic activity or changes in how freight flows. Trouble on either the quayside of a port can mean trouble on the landside and vice versa. Satisfactory resolution requires gatewayoriented solutions based on accurate information and data. Most ports are experiencing some form of congestion - on the waterside, in storage yards, at the truck gates, intermodal rail facilities, local roadways - mostly resulting from larger ships cascading from other trade lanes putting stresses on existing infrastructure not built for these new, increased volumes, but also due to economic recovery. Port assets, therefore, have to be used differently than they have been traditionally. Success results from a system-wide approach to goods movement. Major gateway ports will need to optimize terminal assets through consolidation, automation and smarter terminal, gate and intermodal planning strategies. It will come down to the ability of marine terminals to deal with the spike of volumes coming off larger ships and making "smarter" landside moves. Dwell time is the enemy of productive marine terminals. Engineering companies are working with ports to better use their existing assets, which Moffatt & Nichol does via its simulation and automation software tool, FlexTerm. It generates a lot of information on the performance of terminals and ways to assess and improve existing operations (processes, equipment and labor) that can wring out significant efficiencies. It is also necessary to anticipate changes in flows through a port due to economic activity. Forecasts can be useful but are often revised as frequently as new data is published or are too broad (national versus local) and, therefore, may not be sufficient to warn of impending problems. It can be useful to develop a system of leading indicators in addition to forecasting models, such as: * Surveying ocean carriers, railroads, trucking companies and BCOs to develop a customized forecast. Most companies' build-to-delivery cycles range from 6 to 18 months. Service providers like ocean carriers and railroads usually survey their customers, and ports could do the same. * Developing regional leading, coincident and lagging indicators, similar to those published by the Conference Board, Developing an appropriate database as described above, including data from terminal automation systems and sharing information with supply chain partners, is more important now than ever before. using regional as opposed to national economic data. * Tracking an index of share prices of companies whose business performance is related to the volumes handled at ports. Financial markets are forward looking and can provide an independent view. These indicators are demand-focused, and it is advisable to also focus on supplyside or capacity trends. Volumes can also shift among ports due to decisions made by freight movement companies and, therefore, grow out of sync with economic activity. Developments in the global vessel fleet, the order book and changes in vessel deployments on services can be tracked in order to identify waterside demand trends that may be unrelated to economic trends. Likewise, railroad investments can be useful for characterizing potential future demand changes. It is also important to focus on how variance in daily, weekly or monthly volume might change. The advent of larger vessels is likely driving a greater change in the variance in volumes to be handled than the average amount handled on a daily or weekly basis. The message is that the traditional way of processing cargo and planning has to change in line with changes in carrier alliances, larger ships and supply/demand factors. All of the links in the supply chain are more interdependent than ever before, and a new era of working together must be forged. Developing an appropriate database as described above, including data from terminal automation systems and sharing information with supply chain partners, is more important now than ever before. ● Walter Kemmsies is chief economist at Moffatt & Nichol. FALL 2015 * WWW.AAPASEAPORTS.COM 53 http://WWW.AAPASEAPORTS.COM

Table of Contents for the Digital Edition of Seaports Magazine - Fall 2015

AAPA Headquarters
From the President's Desk
Big Data, Big Possibilities
Greenlight on Green Metrics
An Eye on Data
Trusting Third-Party Data
Data in Latin America
Washington Zeroes in on Port Performance
Improving and Expanding Our Nation's Seaports
Navigating the Waves of Transportation Data
Big, Bad Big Data
Data Strategies to Avoid Trouble Ahead, Trouble Behind
Leveraging Regional Freight Data to Improve Port Connectivity and Boost Trade

Seaports Magazine - Fall 2015